Chapter 455 Butterfly Hurricane: I Can't Do This PR
In October, the Southern Hemisphere is bathed in spring sunshine, lush with greenery, and teeming with life.
In October, the Northern Hemisphere is swept by a brisk autumn breeze, with golden hues covering the land and the sight of abundance promising a bountiful harvest.
However, the international financial market in October 1997 was bleak and gloomy, with no bright spots anywhere.
First, Southeast Asia, which has been mired in crisis since July, has yet to see any country emerge from the financial crisis, even though the rainy season has ended and autumn has arrived. Market performance remains weak and shows signs of worsening.
Secondly, this financial plague began to spread. The short sellers shifted their focus and intensified their attacks on Hong Kong and Taiwan.
Due to the difference in economic size—Taiwan's GDP was US$274.6 billion in 1996, while Hong Kong's was US$169.6 billion; and Taiwan's huge foreign exchange reserves, which reached US$83.5 billion by the end of September, ranking third in the world, after Japan and mainland China.
Therefore, almost everyone believes that the main battlefield of this currency defense war is Taiwan, and the latter also has the strength to win this battle.
As a result, just over half a month into the battle, on October 17th, Taiwan's "Central Bank" suddenly announced that it was giving up defending the New Taiwan Dollar's exchange rate.
This was truly earth-shattering.
Yes, yes, the Taiwanese authorities put a lot of thought into it. They chose to announce it after the market closed on Friday afternoon, October 17th, thus avoiding a frenzied sell-off and severe panic that would have occurred immediately after the announcement. This gave the market a full two days over the weekend to digest this major negative news.
Regulators and financial institutions can also use the weekend to work overtime in preparation for potential turmoil next week.
Yes, yes, yes, Taiwan's decision to abandon its defense of the New Taiwan Dollar exchange rate at this time can be described as a proactive and strategic art of decision-making.
It allowed Taiwan to avoid a large depletion of foreign exchange reserves, prioritized the protection of its monetary policy autonomy, and also dealt a blow to many speculators who were betting on a slow decline in the New Taiwan Dollar. Arbitrageurs, such as those shorting forward foreign exchange, were caught off guard and suffered heavy losses in the face of this move.
In addition, as an export-dependent economy, a moderate depreciation of the currency is beneficial to Taiwan's export competitiveness.
Doesn't all of the above sound like a super exciting novel?
However, its advantage lies in its typical "beggar-thy-neighbor" strategy, which transfers all the enormous devaluation pressure to other economies that are still maintaining a linked or fixed exchange rate.
Taiwan surrendered voluntarily and fled, leaving behind a devastating flood.
For international speculative capital represented by Soros, the abandonment of Taiwan made it crystal clear to them that the last large, liquid market in the region that was still pegged to the US dollar was Hong Kong.
Hong Kong's linked exchange rate system instantly became the most conspicuous target in the eye of this financial storm.
International speculators can quickly withdraw their funds and profits from their victories in the Taiwan market and immediately redeploy their resources to attack Hong Kong.
From the close of trading on the 17th to the opening of trading on the 20th, this weekend is their "golden window" for mobilizing their forces and preparing for a general offensive.
For Hong Kong and other markets, Taiwan's surrender without a fight is even more terrifying than losing the three northeastern provinces without firing a single shot back then.
Even Taiwan, which has the world's third-largest foreign exchange reserves, dared not attack. Market panic spread from small Southeast Asian economies to Taiwan, one of the "Four Asian Tigers," proving that no emerging market is safe.
This panic, like a virus, began to impact the Hong Kong market long before the market even opened on Monday, October 20th.
Everyone now knows that speculators' next target will definitely be Hong Kong.
This unanimous expectation will lead local and international investors to sell Hong Kong stocks and Hong Kong dollars in advance to avoid the expected impact.
This creates an atmosphere conducive to speculators' attacks, significantly reducing their short-selling costs.
The old saying is true: It's not the formidable opponent you should fear, but the incompetent teammate.
Looking at the message sent to his computer, Wang Xiao couldn't help but curse: Shit!
Before she traveled through time, Taiwan's economic status had already plummeted.
To put it simply, the people no longer feel any psychological pressure regarding a military unification; they don't care if everything on the island is destroyed and then rebuilt.
So when she looked at the 1997-1998 financial crisis, she didn't see Taiwan and didn't feel anything special about it.
But in 1997, Taiwan was truly an economy with a strong presence in Asia.
It failed to make a significant contribution to Hong Kong's financial defense, purely because it was a double agent.
It's no wonder that dog meat can't be served at a banquet. No matter how good it looks on the surface, it's a complete failure when it really matters!
Don't stand shoulder to shoulder with it; it's the worst luck imaginable.
Such an irresponsible person is bound to decline step by step.
While cursing, Wang Xiao was thinking rapidly in his mind: what should he do next?
Suddenly, the phone rang, and the assistant came over with the phone to let the boss answer it.
The voice on the other end sounded familiar: "Hello, Mr. Wang, this is Yuan Qingshan. I need your help with something."
Wang Xiao immediately became wary and spoke very carefully: "How can I help you? Does your friend need rice seeds?"
Director Yuan didn't beat around the bush and went straight to the point: "No, we need you to come out of retirement and do public relations for us."
Although the TV show "Public Relations Lady" has been very popular in recent years, and many companies and organizations are learning public relations skills, this is the first time the government has hired a public relations professional.
If it weren't for the urgency of the situation and having no other choice, Director Yuan wouldn't have suggested to his superiors that they ask for outside help to stabilize the situation.
Wang Xiao was dumbfounded, unable to believe his ears.
Sure enough, the 1990s were full of creative ideas, and even government agencies had to hire public relations professionals.
But Wang Xiao refused without hesitation.
She didn't have time; she was in South Africa, focused on the Japanese, Korean, and American markets. Where would she find the time and energy to dedicate herself fully to defending the Hong Kong dollar?
Her reasoning was: "Director Yuan, I'm not kidding you. I really don't plan to do business in the Hong Kong market, and I haven't paid much attention to it. Besides, there's no point in you contacting me now. I'm in South Africa. I don't even know when I'll be able to book a flight to Hong Kong, and what can I do then? I think you should trust the experts at the Hong Kong Monetary Authority; they are the professionals."
Less than half an hour after she hung up the phone, Secretary Fang called her.
The top official of Jiangdong Province didn't stand on ceremony with her and made a direct request: "President Wang, you have to help with this. The situation is extremely tense right now. Taiwan has really gone too far. How could they abandon Hong Kong without even a word? But we absolutely cannot lose this battle to defend it."
Wang Xiaoshi was moved but refused.
She would never give up her own goals for the sake of others, unless it was a matter of life and death; no matter how grand other people's goals were, they wouldn't stand for her.
“I’m sorry, Secretary, I really don’t have the time. I was able to serve as an advisor in Moscow before because Ivan wasn’t the Deputy Prime Minister then, and he was overseeing the business. Now he’s too busy to look after things, and if I don’t keep an eye on this huge operation, with millions of people depending on me for their livelihood, I can’t just ignore them.”
But she still gave the hometown leaders extra face, saying, "How about this, you guys find someone to prepare a few press releases and see how it goes."
Secretary Fang immediately turned on the speakerphone, and his secretary grabbed a pen and began taking notes quickly.
"The first document is a standard official statement, indicating the central government's attitude: it firmly supports Hong Kong's linked exchange rate system and will provide foreign exchange support to Hong Kong at any time."
There's nothing wrong with this one.
However, the second piece Wang Xiao mentioned made the secretary a little uneasy while taking notes.
She said, "I'll post another article saying that the mainland is the most grateful to Taiwan for surrendering without a fight. Because the two sides of the Taiwan Strait have been competing with each other for a long time, and they were almost at war before. This time, Taiwan has sheepishly raised the white flag, which is the time for the mainland to make a big show of its power. So it's hard to say whether the mainland will fight to the death for Hong Kong before Taiwan runs away. But once Taiwan runs away, the mainland will protect Hong Kong to the death, even if it means emptying its coffers."
The secretary hesitated for a moment before asking, "Is this appropriate?"
“That’s appropriate.” Wang Xiao explained quickly, “People only believe what they want to believe. Mainlanders and Hong Kongers live under different systems, and many Hong Kongers cannot understand the mainland’s thinking. Their mindset is that the central government pays for the so-called VIP building. Public relations must think according to the mindset of your audience and tickle their sore spots.”
Secretary Fang made the decision: "Write it down, we'll do it this way."
Wang Xiao's third press release stated: "The mainland has never been afraid of war. Right after its founding, it challenged the United Nations alone, fighting the Korean War to establish its nation. Then it stood up to the Soviet Union, refusing to bow down, and became a leader in the Third World. Next came the Sino-Vietnamese War, which created a favorable international environment for reform and opening up. Finally, during last year's Taiwan Strait crisis, why did the US aircraft carrier only circle twice before leaving? Was it because it ran out of fuel?"
When Secretary Fang heard this, he almost burst out laughing.
Wang Xiao is Wang Xiao; when he gets sarcastic, his words can be incredibly sharp.
She wasn't finished yet: "The mainland has never been afraid of war, but now that the Cold War is over, the world values peaceful economic development. On the new battlefield of finance, the mainland is eager for an opportunity to show its strength and power. It won't lose in a hot war, and it certainly won't lose in a financial war."
Wang Xiao sighed, "Let's release these for now and set the tone. However, the government must be prepared. This time, we can't focus on economic gains. Victory is certain, but heavy economic losses are unavoidable."
The July 1st handover of Hong Kong caused the stock and property markets to be driven to their peak, creating a huge bubble.
If the Hong Kong Monetary Authority wants to protect the Hong Kong dollar, it will inevitably have to raise bank interest rates. The stock and property markets, which have been artificially inflated, will definitely collapse.
These two items alone could easily have caused Hong Kong's wealth to evaporate by hundreds of billions of Hong Kong dollars.
Secretary Fang sighed: "Let's focus on the big picture and let go of the small ones. We can always earn the money back eventually. Now is not the time to calculate the economics."
Wang Xiao laughed and said, "Therefore, we must carefully consider the political implications; we can't afford to suffer such a huge loss for nothing. The fourth press release will be written as..."
The secretary quickly grabbed a pen and scribbled notes: "They always claim that the true Chinese civilization is in Taiwan, but when it really matters, they run away faster than ghosts. What kind of true civilization are they? They have no sense of responsibility! All they do is talk the talk, they're completely useless."
She rattled off a whole bunch of things, but the core idea was to take the opportunity to criticize the Taiwanese authorities. If they're doing something wrong, are you going to cover for them?
Let's get this straight: what we're trying to publicize is that there aren't many eyes in this world that can truly see truth, goodness, and beauty.
Many people simply lack the ability to think independently and blindly follow the crowd. They believe whichever side has the loudest voice, the most appealing arguments, or the most sophisticated presentation, is the truth.
What a great opportunity! It's a once-in-a-lifetime chance. Hundreds of billions are about to evaporate, and you still won't let yourselves have a chance to make a sound?
"Another point is to be prepared for the impact of the financial crisis in other Southeast Asian countries. As far as I know, many banks in Hong Kong have provided loans to industries in other Southeast Asian countries. If these companies go bankrupt and cannot repay their loans, will it drag down the banks that made the loans?"
"If it goes bankrupt, will it damage the confidence of Hong Kong citizens? We probably need to prepare contingency plans in advance."
Secretary Fang listened and nodded, finally sighing with deep emotion: "Wang Xiao, if you were in charge, this matter would definitely be settled."
Wang Xiao smiled gently: "Boss, you just like me, so you think I'm perfect. So, to put it bluntly, public relations is just public relations. All the results are the audience's own choices, and no one can control them. The Hong Kong dollar will definitely hold up, and Hong Kong will definitely win because this is the will of the people."
She's already being generous by offering PR solutions for free; she really doesn't have the energy to stay on-site permanently.
As it turned out, her choice was correct.
Less than half an hour after she hung up the phone, her assistant rushed over to her in a panic: "Boss, the forum is going in the wrong direction. They're planning to start targeting US stocks on October 20th."
Upon hearing this, Wang Xiao quickly stood up. Oh my god! This was something she had painstakingly gathered together; she couldn't let them all go crazy before the battle even began.
The poster's analysis was quite serious. He/she called on everyone to take action on October 20th, arguing that on that day, Wall Street short sellers would inevitably launch a collective attack on the Hong Kong market, neglecting the US stock market.
If they were to make a move at this point, it would be like raiding the home of Wall Street speculative capital.
Wang Xiao sighed and began to complain: "Do they even know what they're doing? Do they even know the size of the US stock market? The US stock market is the world's largest, deepest, and most liquid financial market. The New York Stock Exchange's daily trading volume is in the tens of billions of dollars!"
"What is the size of Southeast Asia? Its currency and stock market have been in a collapse for months. How much capital strength does it have left? To charge in now is like a mantis trying to stop a chariot, or an egg striking a rock—completely pointless. Anything that can only move oneself is a joke!"
She spoke very quickly, but it didn't matter, the assistant had already turned on the recorder, so there was no fear of missing anything the boss said.
While scrolling through the posts, Wang Xiao instructed his assistant: "Make a note of this. After the Asian crisis, the global capital flow will inevitably be towards safety, fleeing risk. Now, looking at the world, what are the universally recognized safest and highest-quality assets? US Treasury bonds and US stocks, especially blue-chip stocks!"
"Not everyone is speculating on capital; most market participants are focused on protecting their assets. After capital flows out of Asia, the first destination is inevitably the United States."
"For Southeast Asian capital to short US stocks at this time is going against the global capital flow trend, it's going against the natural order! With such a small amount of capital from Southeast Asia, isn't it just wishful thinking to try and fight against the world's most powerful financial torrent?"
"Hurry up and go right now! Your short-selling is just providing a cheaper buying opportunity for the funds that are fleeing from Asia to the United States. No matter how much you sell, they can easily buy it all. They'd love for you to sell more."
"The short positions you place in US stocks at this time will be taken in full. This will not only fail to harm Soros and his ilk, but will also help them realize profits and further solidify the United States' status as a 'safe haven.' People think we Asians are just naive and rich, and that we can't do anything except give them money as blood bags."
Wang Xiaoku paused, his throat was dry from talking, and quickly took a sip of orange juice.
As she expected, the post was pushed to the top of the charts very quickly after it was published.
It seems that Japan is very reluctant to see the United States solidify its reputation as a "safe haven".
Someone immediately replied: "Is the US stock market so powerful? Are we just going to stand by and let them cause trouble? We've already admitted defeat before even fighting."
Wang Xiao had to reply: When facing a powerful opponent, you must strike when they are weak. That's what it means to strike while they're weak and kill them. Those who sow the seeds of plague think they can escape far away and only harm others. But in reality, in this era, plagues can easily spread across the globe.
As a result, some people echoed this, citing the example of how Japan used bacteriological warfare during the Nomonhan Incident in World War II, when attacking the Soviet Union. As a result, the bacteria were carried by water to Japanese positions, causing a large number of non-combat casualties among the Japanese army.
When Wang Xiao saw this reply, she felt like covering her face.
I wonder what the Japanese people who are always watching the forum will think when they see this?
Another person replied: What if the plague doesn't spread?
Wang Xiao's answer was: In August, the International Monetary Fund confidently asserted that Thailand's most difficult period was over. Now, almost two months have passed, has the situation improved? Not only has it not improved, but it is also spreading, and it will inevitably spread back to the United States.
Because the United States has deindustrialized, it needs to rely on Asia's cheap labor and land, as well as Asia's vast consumer market. If Asia's economy is hit, the United States will also suffer.
What everyone needs to do now is to pay attention and fan the flames when US stock investors panic and start selling, adding fuel to the fire.
What could they do before that happened? They could only watch as the madman swung his scythe wildly, reaping like the Grim Reaper until the knife cut into them and blood splattered.
Only by keeping an eye on the person can you rush up, forcefully tear open the wound, and make the blood flow more violently until he faints and collapses.
The waiting days are truly agonizing.
This weekend, Wang Xiao estimates that hundreds of millions of people around the world will have a sleepless night.
Some are celebrating, some are anxious, and some are caught in a dilemma.
Human emotions can never control the flow of time. The sun sets and rises again, in an endless cycle. October 20th, Monday, has come as usual, following the timeline.
This day also marks the 10th anniversary of "Black Monday," the stock market tragedy on Wall Street in the United States.
But today, before the US stock market showed any signs of trouble, Hong Kong stocks started to fall.
On October 21 and 22, the Hong Kong Hang Seng Index fell sharply for two consecutive days, with a cumulative drop of nearly 1,200 points, or about 9%.
What does this mean?
Some statistics show that when the Hang Seng Index falls by 1,000 points, short sellers can rake in US$4 billion from Hong Kong.
At the same time, the stock market will lose HK$230 billion in market value.
Compare this to what's really scary, isn't it? It's like demolishing a house, leaving the homeowner homeless, while all the people who demolish the house can take away are bricks and beams.
This is why so many people hate short selling. It's not a normal transfer of wealth, but rather the destruction of wealth.
Regardless of whether this wealth is built up from a bubble.
After two consecutive days of sharp declines, the situation worsened on October 23.
On the evening of the 22nd, international speculators dumped Hong Kong dollars on a large scale in the London market, forcibly pushing the Hong Kong dollar exchange rate down to the weak side of the linked exchange rate system's bottom line.
On the morning of the 23rd, to prevent short sellers from using the liquidity adjustment mechanism for financing, the Hong Kong Monetary Authority (HKMA) issued a notice reminding banks to prudently arrange their Hong Kong dollar financing. Banks should also not rely on the HKMA to provide them with Hong Kong dollars.
This immediately put Hong Kong banks in a state of panic, because it was a settlement day.
A couple of days ago, banks were busy selling Hong Kong dollars for US dollars. Now they don't have enough Hong Kong dollars to fulfill their Hong Kong dollar contracts.
To compensate for the shortage of Hong Kong dollars, there was a rush to buy them. Interbank lending rates skyrocketed instantly, with overnight rates soaring from around 9% to 280% in just a few hours. (Note ①)
As we all know, when bank interest rates rise, the stock index will immediately react.
On the 23rd, the Hang Seng Index plummeted 10.4% in a single day, dropping 1,211.47 points in one go. The market exclaimed: Black Thursday!
As a major international financial center, Hong Kong's stock market crash and abnormally high interest rates immediately made headlines in major financial media outlets around the world.
Wang Xiao received the news immediately, but she was in South Africa and couldn't help but sigh when she saw the headline in the newspaper.
Fortunately, she had been in this world for a long time and had earned a lot of money, so she wasn't so easily distracted by money.
If she had just transmigrated and only had a hundred or two hundred million US dollars saved up, she couldn't guarantee that she could resist the temptation and not reach for that quick money.
It's a huge amount of money, money gushing out, making even more money than gambling.
The assistant, upon seeing the newspaper, was also shaken; the fall had been far too severe.
If we start counting from the peak of 16,800 points in August this year, the Hang Seng Index has now fallen by more than 6,000 points, which is equivalent to a loss of HK$1.8 trillion in market value. This is even more terrifying than the market reaction in countries like Thailand.
If we calculate the loss per person in Hong Kong, based on a population of 6 million, it would be equivalent to a loss of HK$270,000 per person.
Goodness, even though wages are high in Hong Kong, this is still equivalent to one or two years' income for an average person.
Wang Xiao put down her newspaper and asked him, "How's the situation now?"
The assistant quickly replied, "The situation is better today."
In order to obtain Hong Kong dollars in a long-term and stable manner, banks resold US dollars back to the Hong Kong Monetary Authority (HKMA), and the HKMA could only accept the repurchase in accordance with the rules of the Currency Board system.
Now that banks have access to Hong Kong dollars, the overnight interbank lending rate has naturally fallen, now to around 4.5%, and the Hang Seng Index has rebounded accordingly, by 6.9%.
The assistant added, "However, US stocks have started to fall. On October 23, the New York Dow Jones Industrial Average fell 135 points, the London FTSE 100 fell 3.69%, the French CAC 40 and German DAX fell 4.05% and 4.39% respectively, and the Nikkei 225 fell 3.03%..."
Xiao Gang and Xiao Zhao listened casually, not noticing anything amiss at first. Suddenly, they both realized, "Wait a minute, why did they all fall?"
To be honest, these past few days they've been reading the newspapers every day, and it seems like nothing major has happened in Europe and America.
They realized that the trigger for turmoil in financial markets around the world is basically changes in official policies.
For example, in Thailand, on July 2nd, as soon as the government announced that it would abandon the Thai baht exchange rate, the baht immediately began to plummet.
For example, the Hang Seng Index plummeted on October 23rd, also due to an announcement from the Hong Kong Monetary Authority.
So what have the US, UK, France, and Germany been doing these past two days? Nothing at all; everything's been very calm.
Why did the market suddenly go crazy like Mars colliding with Earth, plummeting as soon as it was supposed to?
In fact, Wang Xiao didn't know that the US stock market would fall on October 23rd. According to her memories as a time traveler, the US stock market would fall the following Monday, October 27th, when the circuit breaker mechanism would be triggered for the first time.
But she is the boss, and a boss can remain calm and composed even if a mountain collapses in front of her, as if everything is going according to her plan.
It's normal for global stock markets to fluctuate on the 23rd.
That's Hong Kong!
"Because Hong Kong is an important international financial center, it is closely linked to the world economy. When investors see the collapse of Asian financial centers, they instinctively feel fear and subconsciously sell off risky assets, which leads to a general decline in global markets."
She pressed her assistant for an answer, "Have other markets fallen?"
The assistant quickly replied, "They've all fallen. Brazil and Russia are also falling, by 7.16% and 3.89% respectively."
Wang Xiao nodded, somewhat surprised. She had originally thought the Russian stock market would fall even more sharply.
However, this is just the beginning; it will likely fall even more sharply later.
The boss muttered to himself, "The 23rd is a day of worry, and the 24th will probably be a day of anxiety. People can't sit down and think things through; the more they think, the more anxious they become."
The bodyguards couldn't keep up with her pace and didn't understand who was actually anxious about.
“Fund managers, fund managers all over the world,” Wang Xiao sighed. “Think about it, when the Hong Kong stock market crash broke on the 23rd, how could fund managers have time to think? The market was basically reacting instinctively. The 24th was different; everyone was able to sit down and analyze what was really wrong with Hong Kong’s economy.”
This analysis would leave anyone with even a basic understanding of finance completely bewildered.
It is obvious that Hong Kong is in big trouble.
Such abnormally high interest rates in the market have a huge impact on Hong Kong's economy, causing businesses to go bankrupt and banks to see a surge in bad debts.
In other words, Hong Kong sacrificed its stock market and property market in order to protect its exchange rate.
This means that Hong Kong's economy is likely to fall into a severe recession, and any financial institutions at risk in Hong Kong, including those in Europe and the United States, could suffer huge losses.
With everyone on edge, how could the market not worry that a large number of European and American investment banks and hedge funds holding Asian assets might face huge losses?
This is what makes Hong Kong different from Bangkok.
To put it bluntly, even if Bangkok were bombed and sunk, and physically disappeared, Europe and America wouldn't react much.
Otherwise, the US and Europe wouldn't have reacted so coldly to the rescue package proposed by the International Monetary Fund on August 20, refusing to contribute even a single penny.
Because they feel that Thailand's fate has nothing to do with Europe and America, or at least not to the point where they need to consider Thailand's feelings.
But Hong Kong is different. A collapse in Hong Kong's stock market means a complete collapse of investors' confidence in emerging markets.
Panic, like a rapidly spreading plague, will not spare any fund manager.
Wang Xiao sighed: "Last weekend was the most difficult for the Hong Kong Monetary Authority. This weekend will be even more difficult for them, but fund managers around the world will also have a tough time."
Xiao Gao still couldn't understand: "This is causing panic? Is it really that serious?"
Whether it's London or New York, they're separated from Hong Kong by mountains and sea, and there's a time difference, so why are people so panicked?
“Media!” Wang Xiao tapped the newspaper with his finger. “Physical distance can indeed block the spread of information. To this day, it is very likely that many Europeans and Americans are still unaware of the crisis that is taking place in Southeast Asia.”
"It is said that Europeans and Americans only have eyes for Europe and America, and other countries are more like nouns to them, which they do not care about. However, when Hong Kong's financial situation makes the headlines of major newspapers around the world, it means that everyone knows about it. Even investors who have entrusted their money to fund managers and usually do not pay attention to the investment situation may choose to redeem their funds under the stimulation of this news."
“Fund managers are essentially investing clients’ money, and in this market environment, they may also need to add margin.”
"This means they need a lot of cash to meet next week's demand. And what's the fastest way to get cash? It's to sell highly liquid assets in other markets. And what are the most recognized quality assets in the market right now? They're American blue-chip stocks."
Hearing this, Xiao Gao and Xiao Zhao suddenly realized that after going through such a long and winding road, the boomerang finally struck Wall Street.
The butterfly effect is true; everything is interconnected. A butterfly flapping its wings in South America could potentially trigger a tornado in Texas. (Note ②)
Wang Xiao was impressed: "This is the power of a leading financial giant."
Stock market crashes in other regions occur because people do not trust the market and panic, leading to massive sell-offs.
The further volatility in the US stock market is simply because blue-chip stocks are so valuable that they are the fastest way to cash out.
Those in the room sighed upon hearing this. The survival of the fittest is the essence of the financial market; it has no conscience, no morality, and follows only the law of the jungle.
"Alright, let's get back to work. Fund managers know why they sell off their blue-chip stocks, but ordinary investors don't understand that much. They just know to buy when prices are rising and not when they're falling. If there's no panic, we'll create one for them."
What do short sellers do? Short sellers are panic generators and panic spreaders; otherwise, how could they short sell?
Just as Wall Street short sellers created panic in Southeast Asian markets, it's time for the US stock market to experience that same panic.
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[Let me see] Good morning!
Note 1: Although most sources say that on October 23, the overnight interbank lending rate in Hong Kong soared to 300%, I still believe the account in "A Decade in the Cycle: The Financial Crisis from Asia to the World" that it rose from 9% to 280%.
Note 2: The explanation of the butterfly effect comes from Baidu.
In addition, according to US time, Black Monday in 1987 was October 19th, but due to the time difference, it is also acceptable to say that Black Monday was October 20th in Hong Kong.
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